(Credit: tornado.cash)
The Netherlands' Oost-Brabant district court sentenced Russian Tornado Cash co-developer Alexey Pertsev to 64 months in prison Tuesday because of his involvement in creating and maintaining a crypto mixing tool the court says enables criminal activity and terrorism.
"The operation is completely their responsibility," the court said in a statement of Pertsev and Tornado Cash's two other founders. "If the defendant had wanted to have the possibility to take action against abuse, then he should have built it in. But he did not. Tornado Cash does not pose any barrier for people with criminal assets who want to launder them. That is why the court regards the defendant guilty of the money laundering activities as charged."
The court says Pertsev was aware that Tornado Cash was being used for illicit purposes but didn't care, and had "blinders on" to the "abuse" of the privacy tool. Pertsev was arrested in The Netherlands back in 2022.
"The defendant and his co-perpetrators developed the tool in such a manner that it automatically performs the concealment acts that are needed for money laundering," the court said. "The criminal user is fully being taken care of."
Supporters of the Ethereum mixer like Edward Snowden argue that privacy tools like Tornado Cash should not be criminalized. Most crypto transactions, especially on public networks like Bitcoin and Ethereum, are not fully private or anonymous. Anyone can look up Ethereum transactions on block explorers like Etherscan at any time and view any wallet's transactions and balance. If authorities chose to investigate a wallet's behavior, a wallet's address can ultimately be tied to cryptocurrency exchange accounts and user identities with further investigation.
The US government, however, does not want tools like Tornado Cash to exist because they allow users to anonymize their funds, making it difficult for authorities to track criminal activities like ill-gotten ransomware gains, money laundering, or tax evasion. In 2022, the US sanctioned Tornado Cash because the tool had allegedly laundered funds for North Korea.
Last year, the US arrested one of Tornado Cash's other founders, Roman Storm, and charged the third, a Russian named Roman Semenov, with money laundering. Semenov has not yet been arrested and remains at large, according to a 2023 Justice Department report.